Why Sports Direct Coughed Up $101 Million for Two Bankrupt US Retailers

Just days after Sports Direct took a 7.9 percent stake in Finish Line, the U.K.-based retailer took a more aggressive step to become competitive in the U.S. market.

In a move that was widely anticipated, Sports Direct said on Friday it was granted approval by the Delaware Bankruptcy Court to buy two retailers out of bankruptcy: Eastern Mountain Sports and Bob’s Stores, both owned by Eastern Outfitters LLC.

“It appears to us that Sports Direct is actively making an effort to purchase Finish Line, despite the fact that no mention of an active position was mentioned in the [SEC] filing,” Susquehanna Financial Group LLP analyst Sam Poser wrote Monday. “The purchase of all of Finish Line would provide leverage for Sports Direct’s total operation as well as provide better vendor terms from the likes of Nike, Adidas, Under Armour and others.”

Sports Direct, which was founded in 1982 by British billionaire Mike Ashley and now has 455 sports stores in the U.K., has rapidly expanded its interests in the American market.